The Reserve Bank of India's (RBI) governor Raghu Ram Rajan has kept the Repo Rate unchanged at a five-year low of 6.5% in RBI's 3rd bi-monthly monetary policy review, which was announced today (9th August 2016). This is the outgoing Governor Raghuram Rajan's last monetary policy review meeting . The central bank has cut the repo rate by 150 basis points since January 2015. It further maintained the reverse repo rate at 6%, and the cash reserve ratio at 4%. Here are the highlights of RBI’s monetary policy review and Rajan’s press conference today (9th August 9, 2016)
RBI 3rd bi-monthly Monetary Policy Review Highlights 2016
- Cash reserve ratio or CRR unchanged at 4%
- Repo rate unchanged at 6.50 per cent, Reverse Repo at 6%
- Keeps marginal standing facility (MSF) rate at 7 per cent
- Easy liquidity conditions are prompting banks to transit policy rates through their MCLR
- Banks have passed on rate cut benefit only modestly
- Comfortable with NPAs recognition by banks
- External demand likely to remain sluggish
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